Asia FX weakens slightly, rupee recovers from record low as RBI holds rates
Investing.com - Bank of America has issued a buy recommendation for the Australian dollar against the U.S. dollar at 0.6546, setting a target of 0.69 and a stop loss at 0.6350.
The bank identifies the Australian dollar as the second-worst performing currency in the G10 year-to-date, trailing only the Canadian dollar, but projects AUD/USD to become one of the top-performing G10 pairs in the second half of 2025.
BofA cites "intensifying tailwinds" for the AUD/USD pair, specifically pointing to an expected rebound in Chinese economic growth and decreased probability of policy-driven negative impacts on risk sentiment.
On the U.S. dollar side, the bank anticipates "further, albeit more gradual, USD depreciation," noting that eventual Federal Reserve rate cuts and expected persistent real money USD selling will limit the American currency’s upside potential.
BofA warns that risks to this trade include "a negative turn in risk sentiment," which could potentially coincide with the end of the U.S.-China tariff pause on August 12.
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